J.C. Penney is reportedly considering filing for bankruptcy and closing a quarter of its stores

J.C. Penney is reportedly considering filing for bankruptcy protection as early as next week, though no final decision has been made yet, according to Reuters.

The retailer aims to “rework its unsustainable finances and save money on looming debt payments, which include significant annual interest expenses,” the source added.

J.C. Penney has been on the losing end as the majority of its stores are closed due to stay-at-home orders. Reportedly, a quarter of its 850 stores could permanently close.

The retailer has been battling long-standing struggles for several years now. Like many other businesses in the retail industry, J.C. Penny faced massive losses as shoppers turn to online shopping, eventually decreasing mall foot traffic. The stiff competition and frequent changes in its executive team and strategies also contributed to the department store’s plummet.

The company is standing at a debt of $4.2 billion. It missed its payment on April 15 and is currently on a 30-day grace period that will expire on Friday.

According to Moody’s Investor Service, J.C. Penney has the second-most debt of any distressed retailer next to Neiman Marcus, who’s also looking to consider filing for bankruptcy.

J.C. Penney, however, is in the midst of a turnaround plan that centers on reducing inventory and focusing on its core audience — the middle-class families. The retailer is also looking at a series of negotiations with creditors without filing for bankruptcy.

“We remain focused on our Plan for Renewal and look forward to when we reopen our doors,” says J.C. Penney.

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